BEST OF
By Chris Davis
Edited byPamela de la Fuente
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Real estate crowdfunding has transformed the real estate investing landscape. Once reserved for only the most affluent investors, many crowdfunding platforms have significantly lowered the barrier to entry for this type of alternative investment.
Low account minimums, simple fee structures and clean user interfaces make it easier than ever to include real estate in a well-diversified portfolio. It’s important to note that some real estate crowdfunding platforms, including some of our picks below, are open only to accredited investors.
What's the difference between these platforms and REITs?
Real estate investments trusts are companies that own real estate, such as hotels, malls, shopping centers or rental properties. Publicly traded REITs can be purchased through a brokerage just like individual stocks or mutual funds.
Real estate crowdfunding platforms, on the other hand, pool funds together to let average investors participate in the real estate market through private REITs — which aren’t available through traditional brokerages — as well as private market real estate investments, like individual properties. These could potentially provide higher returns than the REITs available through traditional brokerages, but they may also carry higher risk.
Ready to get started? Below are our top picks for the best real estate crowdfunding platforms based on several factors, including account minimums, customer support, redemption options, fees and more.
Real estate crowdfunding has transformed the real estate investing landscape. Once reserved for only the most affluent investors, many crowdfunding platforms have significantly lowered the barrier to entry for this type of alternative investment.
Low account minimums, simple fee structures and clean user interfaces make it easier than ever to include real estate in a well-diversified portfolio. It’s important to note that some real estate crowdfunding platforms, including some of our picks below, are open only to accredited investors.
What's the difference between these platforms and REITs?
Real estate investments trusts are companies that own real estate, such as hotels, malls, shopping centers or rental properties. Publicly traded REITs can be purchased through a brokerage just like individual stocks or mutual funds.
Real estate crowdfunding platforms, on the other hand, pool funds together to let average investors participate in the real estate market through private REITs — which aren’t available through traditional brokerages — as well as private market real estate investments, like individual properties. These could potentially provide higher returns than the REITs available through traditional brokerages, but they may also carry higher risk.
Ready to get started? Below are our top picks for the best real estate crowdfunding platforms based on several factors, including account minimums, customer support, redemption options, fees and more.
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
Yieldstreet Learn more on Yieldstreet's website | 4.7/5 Best for Nonaccredited Investors | 0% - management fees; other fees apply. | $10,000 | None no promotion available at this time | Learn more on Yieldstreet's website |
EquityMultiple Learn more on EquityMultiple's website | 4.5/5 Best for Accredited Investors | 0.5% - other fees apply | $1,000 | Earn a Special 1% Return Boost on Your First Investment | Learn more on EquityMultiple's website |
RealtyMogul Learn more on RealtyMogul's website | 5.0/5 Best for Nonaccredited Investors | 1% to 1.25% management fees; other fees may apply | $5,000 | None no promotion available at this time | Learn more on RealtyMogul's website |
Fundrise Read review Unpaid non-client promotion | 5.0/5 Reviewed in: Dec. 2023 Period considered: Oct. - Dec. 2023 | 1% other fees may apply | $10 | Advisory fee waiver for 12 months | Read review Unpaid non-client promotion |
Our pick for
Nonaccredited Investors
NerdWallet rating
4.7/5on Yieldstreet's website
Fees
0% - 2.5%
management fees; other fees apply.
Account minimum
$10,000
Promotion
None
no promotion available at this time
Pros
Access to real estate, commercial, legal and art investments.
Ability for individuals to invest in private structured credit deals.
Investments backed by assets, which may provide some protection in event of default.
Cons
Highly illiquid investments.
Most investments open only to accredited investors.
Limited offerings available.
Why We Like It
Yieldstreet allows investors to participate in crowdfunding for a wide array of alternative investments, including real estate, commercial, legal and art. The platform is open only to accredited investors.
Our pick for
Accredited Investors
NerdWallet rating
4.5/5on EquityMultiple's website
Fees
0.5% - 1.5%
other fees apply
Account minimum
$1,000
Promotion
Earn a Special 1% Return Boost
on Your First Investment
Pros
Access to commercial real estate investments.
Easy-to-use website.
Possible high rates of return.
Liquidity options for certain investments.
Cons
Only open to accredited investors.
Complex fee structure that varies by investment.
Why We Like It
EquityMultiple blends crowdfunding with a more traditional real estate investing approach that can lead to high returns. Unfortunately, it’s only available to accredited investors.
Want to compare more options? Here are our other top picks:
RealtyMogul
Fundrise
Last updated on April 1, 2024
Methodology
How do we review real estate platforms?NerdWallet’s comprehensive review process evaluates and ranks companies that allow U.S. customers to invest in real estate, primarily through non-traded REITs or private equity. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across eight factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.
To recap our selections...
NerdWallet's Best Real Estate Crowdfunding Investment Platforms of April 2024
- Yieldstreet: Best for Nonaccredited Investors
- EquityMultiple: Best for Accredited Investors
- RealtyMogul: Best for Nonaccredited Investors
- Fundrise: Best for Nonaccredited Investors
Frequently asked questions
Real estate crowdfunding involves pooling investors' money to fund a real estate project or investment. Often this is done by investing in a private REIT, but some of these platforms also give investors access to private real estate development projects. Some crowdfunding platforms let investors gain exposure to real estate for as little as $500.
While buy-in can be relatively low and the risks are in some cases similar to investing in individual stocks, it's important to note that real estate crowdfunding platforms are new to the investment sphere. How these nascent companies hold up during and after severe market downturns is yet to be seen. Keep in mind that no investment is without risk, and investments that aim for higher returns often carry more risk.
Many of the real estate investments offered in these crowdfunding platforms can be illiquid, or take longer to convert into cash, and are likely better suited to investors who can afford to be patient. If you're looking for an investment that you can sell out of in a pinch to generate cash, traditional investment accounts invested in mutual funds, ETFs, stocks and bonds may be a better fit for you.
Through some online real estate investment platforms, investors can start for as little as $500. However, some of these platforms require higher minimums or that investors be accredited.
Accredited investors are allowed to participate in investments not registered with the U.S. Securities and Exchange Commission. The designation is meant to ensure only those investors with the appropriate experience, funds and understanding of risk can take part in certain investments. Accredited investors must have income of more than $200,000 in each of the last two years (or $300,000 together with a spouse), or have a net worth of more than $1 million, excluding a primary residence.
Some of the biggest advantages of REITs include consistently high dividends (making them a popular choice among investors looking for fixed income), historically high returns and often less volatility than other asset classes. However, publicly traded REITs that can be purchased through a traditional brokerage account are generally considered safer than private REITs offered by real estate crowdfunding platforms.
Public REITs are traded on an exchange just like stocks and exchange-traded funds, and are available through most brokerage accounts. Private REITs aren’t listed on public exchanges, nor are they typically registered with the SEC.
With fewer disclosure requirements, it can be very difficult to evaluate the performance of private REITs. Public non-traded REITs — a third category — are registered with the SEC, but aren’t available on an exchange. Learn more about the risks associated with private and public non-traded REITs.
